Max India EBITDA dropped on 29.1% and EBITDA Margin decreased slightly on 0.50 pp from 4.9% to 4.4%

30-05-2016 • About Max India ($MAX) • By InTwits

Max India reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 4.4% in FY2016, 4.9% in FY2015, 3.9% in FY2014, 11.0% in FY2013, 4.8% in FY2012
Max India has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 1.5%
CAPEX is quite volatile: ₹887m in FY2016, ₹3,265m in FY2015, ₹3,072m in FY2014, ₹2,587m in FY2013, ₹3,316m in FY2012
The company has highly profitable business model: ROIC is 12.8%

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Max India's Revenue dropped on 21.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.1 pp from 20.4% to 26.5% in FY2016.

Net Income margin showed almost no change in FY2016.

Investments (CAPEX, working capital and M&A)

The company's CAPEX/Revenue was 0.76% in FY2016. The company showed small CAPEX/Revenue decline of 1.7 pp from 2.4% in FY2013 to 0.76% in FY2016. For the last three years the average CAPEX/Revenue was 1.9%. CAPEX as a % of Revenue followed a declining trend at -0.65 pp per annum in FY2012-FY2016.

Return on investment

The company operates at good ROIC (12.8%) while ROE is low (9.6%). ROIC showed almost no change in FY2016. ROE increased slightly on 0.70 pp from 8.9% to 9.6% in FY2016.

Leverage (Debt)

The company paid down all the debt in FY2016. Cash surged on 34.3%.

Valuation and dividends

The company's trades at EV/EBITDA 19.0x and P/E 40.4x while industy averages are 17.8x and 21.9x. Max India's EV/(EBITDA-CAPEX) is 23.0x with the industry average at 22.8x.

Management team

Max India's CFO is Sujatha Ratnam. Sujatha Ratnam has 5 years tenure at the company.

Financial and operational results

Max India ($MAX) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	85,369	105,620	116,263	148,154	116,961	-21.1%
SG&A					1,087
EBITDA	4,090	11,579	4,574	7,302	5,179	-29.1%
Net Income	1,550	7,841	1,395	2,796	2,527	-9.6%
Balance Sheet
Cash	4,694	3,374	3,790	2,499	3,357	34.3%
Short Term Debt	1,532	2,981	2,664	1,405	0	-100.0%
Long Term Debt	3,975	3,782	4,353	4,030	0	-100.0%
Cash flow
Capex	3,316	2,587	3,072	3,265	887	-72.8%
Ratios
Revenue growth	28.0%	23.7%	10.1%	27.4%	-21.1%
EBITDA growth	24.9%	183.1%	-60.5%	59.6%	-29.1%

EBITDA Margin	4.8%	11.0%	3.9%	4.9%	4.4%	-0.5%
SG&A, % of revenue					0.9%
Net Income Margin	1.8%	7.4%	1.2%	1.9%	2.2%	0.3%
CAPEX, % of revenue	3.9%	2.4%	2.6%	2.2%	0.8%	-1.4%

ROIC	8.9%	24.3%	7.0%	12.7%	12.8%	0.1%
ROE	7.8%	28.9%	4.7%	8.9%	9.6%	0.7%
Net Debt/EBITDA	0.2x	0.3x	0.7x	0.4x	-0.6x	-1.1x

Peers in Plastic Products

Below you can find Max India benchmarking vs. other companies in Plastic Products industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Acrysil ($ACRYSIL)	-	29.6%	33.8%	19.4%	31.6%
Shaily Engineering Plastics ($SHAILY)	-	-16.0%	23.3%	19.2%	25.5%
Astral Poly Technik ($ASTRAL)	-	41.6%	30.8%	32.4%	20.2%
Flexituff International ($FLEXITUFF)	-	29.9%	12.5%	8.4%	11.5%
Responsive Industries ($RESPONIND)	-	29.4%	15.5%	-19.2%	9.3%
Median (12 companies)	-	24.1%	15.5%	8.4%	6.1%
Max India ($MAX)	-	23.7%	10.1%	27.4%	-21.1%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Acrysil ($ACRYSIL)	12.4%	16.8%	17.5%	19.5%	17.1%
Wim Plast ($WIMPLAST)	18.1%	17.9%	18.1%	17.0%	20.9%
Shaily Engineering Plastics ($SHAILY)	14.3%	13.9%	16.0%	14.8%	17.3%
Jain Irrigation Systems ($JISLJALEQS)	16.6%	12.6%	12.6%	12.4%	12.8%
Responsive Industries ($RESPONIND)	13.4%	11.5%	10.3%	12.2%	9.3%
Median (15 companies)	12.9%	12.1%	12.6%	11.7%	11.9%
Max India ($MAX)	4.8%	11.0%	3.9%	4.9%	4.4%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Shaily Engineering Plastics ($SHAILY)	3.7%	-	10.7%	17.2%	13.0%
Astral Poly Technik ($ASTRAL)	11.9%	8.4%	8.6%	6.0%	8.0%
Flexituff International ($FLEXITUFF)	10.8%	10.3%	15.7%	10.0%	5.0%
Acrysil ($ACRYSIL)	7.8%	11.0%	9.6%	9.3%	5.0%
Jain Irrigation Systems ($JISLJALEQS)	10.9%	6.0%	5.7%	3.6%	3.8%
Median (7 companies)	10.8%	8.4%	8.6%	7.9%	5.0%
Max India ($MAX)	3.9%	2.4%	2.6%	2.2%	0.8%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Wim Plast ($WIMPLAST)	31.8%	31.2%	31.0%	31.2%	31.6%
Shaily Engineering Plastics ($SHAILY)	19.5%	15.0%	19.3%	15.2%	18.2%
Astral Poly Technik ($ASTRAL)	29.3%	31.1%	33.3%	19.7%	17.3%
Acrysil ($ACRYSIL)	7.7%	16.2%	20.2%	21.0%	16.9%
Jain Irrigation Systems ($JISLJALEQS)	13.4%	8.3%	9.0%	8.6%	8.4%
Median (21 companies)	10.2%	10.9%	19.3%	15.2%	16.9%
Max India ($MAX)	8.9%	24.3%	7.0%	12.7%	12.8%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Jain Irrigation Systems ($JISLJALEQS)	3.8x	5.1x	4.8x	4.8x	4.6x
Flexituff International ($FLEXITUFF)	2.2x	3.1x	4.3x	5.3x	4.5x
Responsive Industries ($RESPONIND)	3.3x	2.9x	2.4x	1.9x	1.7x
Shaily Engineering Plastics ($SHAILY)	1.9x	1.8x	1.9x	2.6x	1.5x
Acrysil ($ACRYSIL)	2.9x	2.2x	2.0x	2.7x	1.4x
Median (18 companies)	2.2x	2.2x	0.0x	0.0x	0.0x
Max India ($MAX)	0.2x	0.3x	0.7x	0.4x	-0.6x

Max India stock price chart

Max India financials

mln.	FY2010	FY2011	FY2012

Revenue	213,468	66,675	85,369
EBITDA	-19,033.423	3,274	4,090
Net income	-715.751	86.764	1,550
CAPEX	1,774	3,408	3,316
Debt	9,615	10,340	5,507
Cash	2,043	2,164	4,694

About Max India

Max Financial Services Limited, through its subsidiaries, operates in the life and health insurance, clinical research, healthcare, and senior living businesses in India and internationally. It provides a range of life insurance and health insurance products. The company also offers healthcare services in Delhi and the National Capital Region through its primary and tertiary health care delivery centers in the areas of minimal access, metabolic and bariatric surgery, cardiology, aesthetic and reconstructive surgery, internal medicine, neuro sciences, orthopedics and joint replacement, obstetrics, and gynecology and pediatrics. In addition, it is involved in leasing of medical and other equipment; and the treasury investments business, as well as in the business of senior living. Further, the company offers clinical research services consisting of study management, project management, data base management, monitoring, and clinical trial pharmacy supply chain management services to the pharmaceutical, medical device, biotechnology, and contact research organizations worldwide. Additionally, it manufactures and sells specialty plastic products, such as packaging un-metalized bi-axially oriented polypropylene (BOPP) films and metalized BOPP films, including high barrier films, thermal lamination films, and leather finishing foils to packaging industries comprising food packaging, overwrapping, consumer products, labels, and textile industries; and a line of leather coating films. The company was formerly known as Max India Limited and changed in Max Financial Services Limited in January 2015. Max Financial Services Limited was incorporated in 1982 and is headquartered in New Delhi, India.